London house prices continue to fall

London house prices continue to fall

London house prices continue to fall

The National Bureau of Statistics (NBS) says the Consumer Price Index (CPI), which measured inflation for July dropped to 11.14 per cent (year-on-year) from 11.

Samuel Tombs, chief United Kingdom economist at Pantheon Macroeconomics, said a pick-up in the cost of recreational goods and services to 3.1%, from 2.4% in June, mostly related to computer games, was another reason for the rise in average prices.

Slowing in United Kingdom house price growth over the past two years is driven mainly by a slowdown in the south and east of England, the Office for National Statistics said.

Retail inflation fell to a nine-month low of 4.17 percent in July on account of a slowdown in the prices of vegetables and fruits, said government data released on Monday.

Although detached properties enjoyed an increase of 3.2% in June, this is down from 4% in May, possibly indicating that rising house prices are creating difficulties for buyers.

The average United Kingdom house price was £228,000 in June - £1,000 higher than in May and £6,000 higher than in June 2017.

While London estate agent and former RICS residential chairman Jeremy Leaf comments: "House price growth outside of London is being supported by a continuing shortage of stock whereas the capital and the southeast can't hide behind this excuse any longer".

Mike Hardie, head of inflation at the ONS, said: "Transport tickets and fuel, along with often erratic computer game prices, drove up costs for consumers". Average UK property values increased by 3% compared to a year earlier, down from 3.5% in May.

For manufacturers, the cost of raw materials was 10.9% higher than in July 2017, the biggest rise in more than a year.

Clothing and footwear prices fell by 0.4% year on year, coinciding with the summer sales period on the high street, but households were hit by an increase in food and non-alcoholic drink prices, which rose by 2.3pc.

The previous low was in October 2017 at 3.58 per cent.

He added: "Given the recent weakness of the pound, inflation may remain sticky at around this rate for the next few months, keeping real wage growth to a minimum".

'That market is still raging like a furnace and the resulting annual growth figure is calling out the popularity of the Help to Buy scheme.

'The big question is what happens to prices when the property market's own version of Quantitative Easing is taken away?'

While it is taking buyers longer to complete on their homes from 16 weeks past year to 18 weeks on average. The number of house sales is a bit lower than it was at the same time previous year. "While the Bank of England's recent interest rate rise adds further pressure to household finances, we don't expect the cost of borrowing to alter significantly".

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